Angel and venture capital investors attending this year’s Michigan Growth Capital Symposium, on May 16 and 17, will get an early preview of a number of high-potential U-M spinout companies that are commercializing cutting-edge technologies developed by Michigan faculty, staff and students in the University’s research laboratories. Initially, these spinouts receive business-development assistance from the Venture Center at the U-M Office of Technology Transfer. Currently, 12 companies reside at the center’s Venture Accelerator in the North Campus Research Complex where they work closely with mentors-in-residence drawn from the ranks of seasoned entrepreneurs and venture investors.
“For many of our spinout companies, the MGCS is the first step in pitching to angels and venture capitalists to raise funding as they launch and to gain exposure to the venture investment community, not just locally, but across the Midwest and on the coasts,” says Mike Psarouthakis, the Venture Center’s new director. The symposium, he adds, offers an incredible networking event for the company founders and CEOs as well as the Venture Center itself, which continually seeks to add new investors to its pipeline and update them about exciting research projects and emerging companies at the University.
For the past three years, Michigan has been an anchor school at the MGCS’s University Research Track, a fast-paced, hour-long presentation where technology-transfer and commercialization officials from leading universities outline the research facilities, spending and sector focus at their respective institutions. The officials also highlight innovative spinouts that have licensed intellectual property originating at their schools. Psarouthakis, who succeeded Jack Miner as Venture Center director, anticipates Michigan will have another bumper crop of emerging companies to showcase again this year.
In 2016, U-M Tech Transfer received 428 invention disclosures, signed 173 license agreements, issued 135 patents and launched 12 startups. Approximately 90 percent of the licensing agreements for U-M technologies are signed by large companies, such as General Motors Company and Dow Chemical. The remaining 10 percent go down the startup pathway and end up at the Venture Center.
“Startups need a lot more assistance because often their technology was developed by professors or graduate students who lack business acumen and venture capital fundraising experience,” Psarouthakis explains. “Our expert team helps founders develop the business concept to commercialize their technology.” Among the biggest challenges, he says, are ensuring: 1) there is an appropriate market for the company’s product or service; 2) the startup has enough capital to survive until its sales reach a sustainable level; and 3) the company has the business talent on board to provide leadership. The Venture Center also offers guidance through the startup’s initial rounds of funding and engages with the venture community.
Historically, more licensing opportunities and startups have emerged from the life sciences at U-M, but that pattern is evolving, according to Psarouthakis. “Software will have a big impact going forward,” he predicts, “and we’ll see startups coming from many schools and colleges where we haven’t seen them in the past.”
Psarouthakis says a major priority for 2017 will be stepping up the level of engagement with the MCGS and other entrepreneurial centers and events, both on and off the Michigan campus. “We are trying to make the ecosystem more entrepreneurial and exciting, so our U-M companies can be more successful,” he explains.